Total Money Market Fund Assets, as reported by the Investment Company Institute,
increased $1.0 billion last week (week ended March 29) to $2.056 Trillion.
Money Market Fund Assets are about unchanged y-t-d, with a one-year gain of
$150 billion (7.8%).

Total Commercial Paper dipped $0.5 billion last week to $1.711 Trillion. Total
CP is up $61.8 billion y-t-d (13wks), or 15.0% annualized, while having expanded
$262 billion over the past 52 weeks, or 18.1%. Last week, Financial Sector
CP borrowings fell $11.3 billion to $1.565 Trillion (up $57.1bn y-t-d), with
a 52-week gain of $273 billion, or 20.9%. Non-financial CP jumped $10.8 billion
to $146 billion, with a 52-week declined of 7.5%.

March 31 - Reuters (Nancy Leinfuss): "Strong demand for higher quality, low
duration investments kept the pipeline of new supply active in the U.S. asset-backed
securities market this year, market participants say. In the first quarter,
issuers sold $254.2 billion in ABS deals versus $250.1 billion for the
same period, a year ago, according to Thomson Financial. Investor appetite
for the asset class backed by pools of home equity, auto, credit card and student
loan receivables, stayed robust."

Fed Foreign Holdings of Treasury, Agency Debt ("US marketable securities held
by the NY Fed in custody for foreign official and international accounts")
increased $5.2 billion to $1.592 Trillion for the week ended March 29. "Custody" holdings
were up $73 billion y-t-d, or 19.3% annualized, and $198.3 billion (14.3%)
over the past 52 weeks. Federal Reserve Credit declined $6.7 billion last
week to $814 billion. Fed Credit has declined $12.3 billion y-t-d, or 6.0%
annualized. Fed Credit expanded 4.8% during the past year.

International reserve assets (excluding gold) - as accumulated by Bloomberg's
Alex Tanzi - are up $209 billion y-t-d (20.6% annualized) and were up $463
billion, or 12.3%, over the past 12 months to a record $4.255 Trillion.

March 29 - UPI: "China has surpassed Japan in foreign exchange reserves, China
Business News reports, which could intensify U.S. pressure for Beijing to revalue
its yuan. China's foreign exchange reserves reached $853.7 billion at the end
of February, the newspaper reported Tuesday. Japan's Finance Ministry said
earlier this month that Japan's forex reserves were $850 billion at the end
of February."

Currency Watch:

The dollar index fell slightly this week and ended the quarter down 1.7%.
On the upside this week, the Czech koruna gained 1.7%, the Hungarian forint
1.7%, the South African rand 1.6%, the Australian dollar 1.5%, the New Zealand
dollar 1.5%, and the Iceland krona 1.2%. For the week on the downside, the
Colombian peso fell 1.3%, the Japanese yen 0.9%, and the British pound 0.5%.
Year-to-date, the big gainers include the Indonesian rupiah up 8.4%, the Brazilian
real 7.9%, Romanian leu 7.0%, Thai baht 5.5%, Czech Koruna 4.5%, the Philippines
peso 4.0%, the South Korean won 4.0%, and the Russian ruble 3.7%. Year-to-date
on the downside, the Zimbabwe dollar fell 14.7%, the Iceland krona 11.8%, the
New Zealand dollar 10.0%, and the Chilean peso 2.7%. The Euro gained 2.35%
against the dollar, the British pound 0.8%, and the Swiss franc 0.7%.

Commodities Watch:

March 27 - Bloomberg (Wing-Gar Cheng): "China increased oil imports for a
second month in February as refiners...built crude stockpiles because they
expect higher domestic fuel prices. Purchases by the world's second-largest
oil consumer rose 7.9 percent from a year earlier to 11.2 million metric tons
(82 million barrels)... The nation's oil import bill jumped 57 percent to $4.95
billion last month..."

March 31 - Bloomberg (Jeb Blount): "Cia. Vale do Rio Doce, the world's largest
iron-ore producer, wants steelmakers in Asia and Europe to pay 24 percent more
for iron ore in 2006 than they paid in 2005, Vale spokesman Fernando Thompson
said..."

Gold traded yesterday to the highest level ($594.60) since January 1981 (according
to Bloomberg). Sugar traded to the highest level since 1989. May crude rose
$2.37 to $66.63. May Unleaded Gasoline rose 3.8%, while May Natural Gas declined
3.3%. For the week, the CRB index rose 1.9% (y-t-d up 0.4%). The Goldman Sachs
Commodities index jumped 2.4%, increasing y-t-d gains to 2.5%.

Japan Watch:

March 31 - Financial Times (David Turner): "Japan's unemployment rate has
plunged to its lowest level in almost eight years, government figures showed
on Friday, confirming the country's continuing economic recovery and pointing
to a further strengthening of inflationary pressure... According to the government,
the rate dropped to 4.1 per cent in February, the lowest since July 1998 and
down from 4.5 per cent in January - the biggest monthly drop on record... The
jobs-to-applicants ratio rose to a 14-year high of 1.04..."

March 27 - Bloomberg (Kyoko Shimodoi and Mayumi Otsuma): "Japan must cut spending
by almost a fifth to eliminate the annual fiscal deficit by 2011 and stop expanding
public debt, a Ministry of Finance advisory panel said. The government needs
to reduce spending by 13.1 trillion yen ($112 billion), or 18 percent of the
level budgeted for the year...to meet the goal without increasing taxes..."

March 31 - Bloomberg (Megumi Yamanaka): "Japan, the world's largest consumer
of crude oil after the U.S. and China, said oil imports rose 11 percent in
February. Oil imports were 21.3 million kiloliters (134 million barrels) last
month... Japan imports more than 99 percent of its oil, according to the ministry."

China Watch:

March 27 - Bloomberg (Xiao Yu): "China should use its increasing foreign-exchange
reserves to buy gold, the Financial News reported, citing an official
at the Bank of China. The government should buy gold with foreign reserves
to 'diversify and gain higher returns' on the assets, the central-bank affiliated
newspaper reported, citing Wang Yuanlong, a doctor of economics and a board
member of Bank of China's Australian unit."

March 27 - Bloomberg (Jianguo Jiang): "China's economic growth may slow to
8.9 percent this year, the China Securities Journal said, citing a central
bank report. The consumer price index may rise about 2 percent this year, the
newspaper said... China's economy expanded 9.9 percent in 2005 with inflation
at 1.8 percent, according to government data."

Asia Boom Watch:

March 30 - Bloomberg (Amit Prakash): "The World Bank raised its 2006 growth
forecast for most of Asia as demand for the region's technology exports accelerates
in the U.S., Europe and Japan. The Washington-based lender increased its 2006
forecast for East Asia, which excludes Japan and the Indian subcontinent, to
6.6 percent from a November estimate of 6.2 percent, citing faster expansion
in the region's export-reliant economies. 'A lot of the growth is being fueled
by exports,' [said] Homi Kharas, the bank's chief economist for East Asia and
the Pacific... 'Growth is very broad based. Coming into 2006, things look quite
strong.'"

March 27 - Bloomberg (Kartik Goyal): "India's revenue from direct taxes such
as company and personal income tax rose 24 percent so far in the current financial
year, said a finance ministry official... Revenue from direct taxes rose to
1.48 trillion rupees ($33 billion)... Collections from company tax rose 19
percent...while revenue from personal income tax rose 32 percent..."

March 27 - Bloomberg (Shamim Adam): "Singapore's factory production grew in
February at almost double the pace economists had expected as pharmaceuticals
output from companies such as Merck & Co. increased more than four-fold.
Manufacturing, which accounts for a quarter of Singapore's $119 billion economy,
rose by a seasonally adjusted 17.6 percent from January..."

Unbalanced Global Economy Watch:

March 28 - Bloomberg (Simone Meier): "Money supply growth in the economy of
the dozen euro nations accelerated in February to the fastest in five months,
giving the European Central Bank room to raise interest rates further... M3,
the ECB's preferred measure of money supply, rose 8 percent from a year earlier,
up from a 7.6 percent gain in January... ECB council members including
Axel Weber and Yves Mersch have cited concern about rising liquidity and oil-driven
inflation in the euro region, suggesting they may back an interest rate increase
from 2.5 percent..."

March 29 - Bloomberg (Simone Meier): "European Central Bank council member
Yves Mersch said the impact of higher oil costs is starting to feed through
to other prices in the economy of the dozen euro nations, suggesting he may
back further interest rate increases. 'We're beginning to see a certain impact
of indirect price rises,' Mersch told the International Herald Tribune... The
comments were confirmed by the Luxembourg Central Bank, which he heads. The
ECB still has 'to walk the talk' in delivering price stability, Mersch said."

March 28 - Bloomberg (Sheyam Ghieth): "Italian business confidence climbed
to a five-year high as rising orders heightened optimism that Europe's accelerating
economy is stimulating demand for Italian exports..."

March 29 - Bloomberg (Tracy Withers): "U.K. economic growth accelerated to
the fastest pace in a year in the fourth quarter, powered by a pickup in services
and government spending. Expansion quickened to 0.6 percent in the three months
to Dec. 31 from 0.5 percent in the previous quarter... The annual rate of growth
was 1.8 percent, the same as in the third quarter."

March 27 - Bloomberg (Laura Humble): "U.K. house prices rose in March by the
most in more than a year an a half, led by a jump in London, a survey by Hometrack
showed. The average cost of a home in England and Wales rose 0.5 percent, the
biggest gain since June 2004, to 162,500 pounds ($282,000) from Feb. 17 to
March 17..."

March 31 - Bloomberg (Trygve Meyer): "The pace of borrowing by Norwegian households
and businesses advanced in February, increasing pressure on the Nordic country's
central bank to raise interest rates for a fourth time since June. Credit growth
for households, companies and municipalities accelerated to an annual 13.8
percent from a revised 13.3 percent a month earlier..."

March 30 - Bloomberg (Tasneem Brogger): "Iceland's central bank, seeking to
quell a speculative run on the national currency, raised its benchmark interest
rate by a greater-than-expected three quarters of a percentage point. The krona
gained. Reykjavik-based Sedlabanki increased the repurchase rate to 11.5 percent...
Investors have poured into Iceland to take advantage of state-asset sales and
tax cuts, driving the krona up 41 percent against the dollar in the four years
through December and sending the benchmark stock index to a record high."

March 29 - Bloomberg (Gemma Daley): "Australian exports reached a record A$176.7
billion ($124 billion) in 2005, fuelled by extra commodities shipped to China,
Trade Minister Mark Vaile said. 'China is generating a lot of demand,' Vaile
told the National Press Club in Canberra. 'Whether you are a farmer battling
against the forces of nature to get your livestock or grain to market, a worker
on the factory line or an engineer designing a bridge, you will be affected
by the rise of China.' Australia is the world's largest shipper of alumina
and coal, with raw materials making up almost 60 percent of the nation's export
earnings. Minerals and energy exports surged 47 percent in 2005."

March 31 - Bloomberg (Victoria Batchelor): "Australian retail sales increased
more than twice as much as expected and building approvals gained from a five-year
low in February, helping spur a rebound in economic growth. Retail sales rose
0.7 percent from January, when they gained a revised 0.9 percent, and approvals
to build homes and apartments climbed 2.2 percent... Credit provided to consumers
and businesses jumped 1.4 percent, the largest increase in two years..."

March 29 - Bloomberg (Tracy Withers): "New Zealand consumer confidence fell
to the lowest in more than five years in the first quarter because of expectations
that record-high interest rates will crimp incomes and make jobs less secure."

Latin America Watch:

March 31 - Bloomberg (Andrea Jaramillo): "Colombia's economy expanded in the
fourth quarter, making 2005 the fastest year of growth in a decade, as a strengthening
peso and falling interest rates spurred a surge in consumer demand... The Colombian
economy expanded 5.13 percent in 2005, following revised growth of 4.78 percent
in 2004..."

Bubble Economy Watch:

March 28 - New York Times (David Cay Johnston): "The number of American
households with a net worth of $1 million or more, excluding their principal
residence, grew to a record 8.9 million last year, the British market
research firm TNS Financial Services said in a report...More than one in
seven of the households were in just 13 of the nation's 3,140 counties, TNS
said. The number of millionaire families rose to 7.1 million in 1999...and
then, after the Internet bubble burst, dropped steadily to 5.5 million by
2002. The ranks of millionaire households rose to 6.2 million in 2003 and
8.2 million in 2004, she said. In most large counties, about one household
in 12, or about 8.5 percent, was worth $1 million or more... The exception
was Nassau County on Long Island, where millionaire families were more than
twice as common, at 17.5 percent of all households. The households had an
average net worth, excluding principal residence, of nearly $2.2 million,
of which more than $1.4 million was in liquid, or investable, assets."

March 29 - Bloomberg (Bob Willis): "Consumer confidence in the U.S. economy
jumped in March to the highest level in almost four years, driven by a strengthening
labor market that's lifting incomes and giving Americans the means to spend.
The Conference Board's confidence index rose to 107.2, the highest since May
2002, from 102.7 in February... The number of people who said jobs were plentiful
increased to the highest level since before the September 2001 terrorist attacks,
helping power spending and the economy."

March 24 - Dow Jones: "Banks have kept easing credit standards and non-price
lending terms despite monetary policy-tightening the Federal Reserve began
in mid-2004, Fed Chairman Ben Bernanke said this week in a letter to a U.S.
lawmaker. 'The available evidence suggests that credit standards and a number
of non-price lending terms for both households and businesses have eased as
the FOMC (Federal Open Market Committee) has raised its target for the federal
funds rate," Bernanke said in a letter to Rep. Harold Ford, D-Tenn."

Energy and Crude Liquidity Watch:

March 27 - Financial Times (Carola Hoyos): "Mergers and acquisitions in the
oil and gas industry tripled in value last year to $160bn - the highest level
since the boom year of 1998 when Exxon and Mobil merged, BP took over Amoco,
and Total bought PetroFina. Deals by Chinese oil and natural gas companies,
meanwhile, are expected to have grown sixfold to $6bn in 2005 as they became
big international players, buying assets from Ecuador to Sudan and Syria, according
to an authoritative industry study."

Speculator Watch:

March 26 - Financial Times (Stephen Schurr): "Hedge funds' assets under management
around the world have topped $1,500bn, with the US alone surpassing $1,000bn,
according to a new survey from HedgeFund Intelligence. The report...also shows
that European hedge fund assets have topped $325bn, up 25 per cent from last
year's survey. London hedge fund managers run $255.5bn, or 78 per cent, demonstrating
how the City is rapidly become a significant centre for hedge funds as they
become global enterprises....Asian funds climbed to $115bn as hedge funds rushed
to take advantage of the growth in emerging markets there as well as the economic
recovery in Japan. The study also indicated that the biggest funds continue
to get bigger. The US "Billion Dollar Club" - hedge funds with assets of more
than $1bn - now accounts for more than $850bn in assets. Funds with less than
$1bn hold at least $200bn, the study found. "The passing of the $1,500bn mark
shows how strongly the hedge fund sector is growing, particularly given the
difficult market conditions encountered by many hedge fund managers in the
past 12 months," said Neil Wilson, managing editor of HedgeFund Intelligence. "All
three of the major regions are attracting a good flow of new investment money..."